In a compelling conversation with CanadianSME Small Business Magazine, Michael Trendler, a national leader in Professional Liability and Cyber Liability at Travelers Canada, shared his three decades of expertise in the commercial insurance market. As businesses face escalating cyber risks, Michael provides actionable insights into safeguarding against digital threats and evolving liability concerns.
From emphasizing employee education to adopting robust cybersecurity protocols and leveraging advanced cyber liability coverage, Michael highlights critical strategies that Canadian businesses must adopt to navigate the complexities of today’s digital landscape. With cyber threats topping the 2024 Travelers Canada Risk Index, this discussion is a must-read for businesses aiming to stay resilient and secure.
Michael Trendler has 30 years of experience in the commercial insurance market with over 20 years in management liability, professional liability and cyber lines. He has spent a portion of his career working in the US market on both the broker and company side and was involved in some of the earliest cyber liability programs. During his career, Michael has worked in a management capacity in the specialty lines and cyber areas for three major insurers and has also been a national cyber resource.
Michael is currently responsible for the Professional Liability and Cyber Liability field operations on a national basis at Travelers Canada.
Cyber risks have topped the list of business concerns for Canadian companies, according to the 2024 Travelers Canada Risk Index. What do you believe is driving this heightened awareness and concern among business owners?
Canadian businesses are increasingly aware of the persistent and growing nature of cyber threats. Cyber risks are the number one concern for the second year in a row, with nearly two-thirds (65 per cent) of respondents worried about these threats, up from 61 per cent last year. Compared to other risks, such as economic uncertainty (62 per cent) and financial issues (57 per cent), cyber threats are seen as more immediate and complex. Additionally, 66 per cent of businesses believe they will inevitably experience a cyberattack, reflecting the serious threat such events have, from unauthorized access to financial systems (cited by 60 per cent of respondents as a top concern) to potential security breaches and system glitches.
Given the evolving landscape of cybersecurity threats, what are some key steps businesses can take to reduce their vulnerability to cyberattacks?
To mitigate cyber risks, businesses should prioritize employee education and adopt cybersecurity protocols. Training staff is essential, as unsafe computing practices were a factor in 35 per cent of recent cyber incidents, according to our survey. Core steps include implementing multi-factor authentication (63 per cent of companies are doing so, according to the survey), updating software to prevent vulnerabilities (62 per cent) and using firewalls (63 per cent). Cyber insurance is also an important safeguard, covering costs related to breaches and ransomware. Companies should also have a crisis communications plan for internal and external stakeholders to protect brand reputation if an incident occurs.
How has cyber liability coverage evolved over the years, and what new areas should businesses consider when looking for protection in today’s digital environment?
Cyber liability coverage now offers broader protection, covering costs such as breach response, ransomware recovery, fraud losses and lost income due to business interruption. Many policies also protect against third-party liabilities, such as legal and regulatory expenses after a breach. Additionally, some insurers now offer “pre-breach” services, including cybersecurity assessments and employee training, to help businesses avoid incidents. Nearly 30 per cent of those surveyed have already faced a cyber incident, highlighting the need for businesses to work with insurance brokers to secure comprehensive, up-to-date coverage that aligns with their specific cyber risks.
What role does employee education play in managing cyber risks, and what are some effective practices companies can implement?
Employee education is crucial in managing cyber risks since many breaches result from human error. In fact, according to our survey, 35 per cent of companies that faced a cyber incident said it was due to employee-related issues. Effective practices include regular training to recognize phishing attempts, enforcing secure password protocols and periodic security tests to gauge employee readiness. Empowering employees to identify and respond to threats establishes a strong defense, helping reduce overall vulnerability to cyber incidents.
Looking ahead, what advice would you offer to small and medium-sized businesses in Canada to proactively manage their cyber and liability risks in the coming years?
Small- and medium-sized businesses should adopt a proactive cybersecurity strategy. Cyber threats are a concern for both small- and medium-sized businesses alike. Essential actions include educating employees on cyber risks, implementing multi-factor authentication and ensuring regular data backups. Cyber insurance is also essential, although our research found that coverage rates have declined to 66 per cent from 72 per cent a year ago. Finally, conducting regular security audits and adopting data protection protocols will help businesses remain resilient in an increasingly digital landscape.
